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India-Israel Investment Pact Takes Effect, FTA Talks Next
India's bilateral investment pact with Israel is now in force, offering investor protections and dispute arbitration. FTA talks remain the next catalyst for deeper trade ties.
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India and Israel's Bilateral Investment Agreement entered into force on July 4, the Indian government confirmed Saturday. The pact, signed in September 2025, covers investments in both directions, protecting against expropriation and guaranteeing profit repatriation with access to international arbitration.
The agreement gives investors a legal backstop that was absent for years while trade talks stalled. India had resisted investor-state dispute settlement clauses in previous negotiations, arguing they limited sovereign policy space. The final version includes carve-outs for regulatory actions on health, environment, and national security, people familiar with the talks said at the time of signing.
Negotiations for a full Free Trade Agreement are underway. The first round of FTA talks concluded in March, with the next session expected later this year. An FTA would go further than the investment pact by cutting tariffs on goods and services, particularly in sectors where bilateral trade has room to grow.